Some interesting and important insights were revealed in T. Mazumdar & K. Monroe’s 1990 study of how consumers recall individual prices vs. their brand name awareness.
Ashley Bunker [Anonymous Shopper] writes: “…Couponing is not just for women, it is for every human being wanting to save money. Why should we have to pay retail price for anything in this day and age anyways!…”
Shoppers remember brand prices when first doing research – but they also don’t remember price rankings of other brands. When shopping, consumers are better at remembering price rankings of brands than specific prices.
Retailers need to pay attention to the following implications of this: If the retailer’s objective is to inform buyers of price changes in a choice set, this objective will probably not work.
Retailers can benefit from these insights by presenting the sale information differently.
Price ranking is usually uppermost in shopper’s minds. Price changes affecting these relationships are likely to have a bigger impact on overall sell through on these items.
Research has suggested that a large proportion of supermarket shoppers do not make brand choices on price.
Jesus Saves! By using double coupons and shopping wisely. – Bumper Sticker
Some other important studies determining how and under what conditions shoppers who buy on deal, recall purchase prices for goods they just purchased. another 1993 study in the Journal of Retailing asks the question: Who are these people who can accurately recall the price of the item they just placed in their grocery cart? – In essence they are 1) Lower income consumers 2) Consumers who recall the chosen brand’s promotional status 3) or use price in making their brand choice are the most likely to recall price information.
Are price vigilant shoppers characteristically different from price ignorant shoppers – YES!
Knowing what kind of people notice and recall prices is important to retail management, who would be interested in determining the cost -effectiveness of sales promotions and identifying demographic profiles of those who respond to price cuts.
Other studies have also looked at how deals, sales and specials work and attract customers. A 1985 Journal of Business study, suggests that there are two types of buyers. People who have ample room to store excess goods who ‘forward buy’, taking advantage of deals, vs people with higher inventory holding costs, who typically buy at regular price. More intense-demand buyers typically have ‘larger households’.
Tom @ Canadian Finance Blog December 31, 2009 at 12:20 pm: “The results don’t totally surprise me. I’m big on using coupons and shopping sales, almost never pay regular price for anything.”
Consumers who buy on deal are less likely to buy at the regular price. Offering deals at random might minimize this opportunistic behavior.
Some pundits have suggested that price vs. intent to buy are complex interactions. Some studies have even suggested that there is little value in measuring sensitivity to price, in isolation of other marketing variables – such as absence or intensity of advertising promotion or display.
One study they reference concluded customers find it difficult to remember specific prices, but have a good “general knowledge” of proper price ranges.
Another referenced study suggested that a large percentage of shoppers neither know prices beforehand or after purchase of brands they intend or have bought.
Those in the highest education group were most likely to have no recall of prices, reflecting the low level importance they attach to price in their purchasing decisions.
Such disruptive outside influences such as special pricing, competition, inflation, metrication of sizes, have inevitably led to substantial changes in price awareness.
In conclusion: socio-economic factors are strongly related to price recall. Price is of the greatest importance to lower income, larger households, less educated and older shoppers.
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